Make Offer

Make Offer

Formula for making offers on bank repo houses

When we make an offer on bank repo houses, we generally pay 70 percent after repaired value. This means that for an all cash deal ARV of $100,000 at 70 percent is $70,000. And lets assume 10,000 in repairs, which takes me down to 60,000. This is the Maximum Allowable Offer or MAO.

I took a look at what I’d been offering in the past on repossessed homes for sale and I found out that if I take this 60,000 at 84 percent which would come out to 54,400. That was what I was doing with my MAO.

I’m not saying that’s the way you want to do it. I’m just saying that’s my system. What that allowed me to do was teach Kevin what to offer below MAO.

I had to lock down a number with Kevin that was consistent and a cookie cutter. So that’s my number. I also always advise to adjust your number according to the market. This means the market in your area. Obviously housing prices in Honolulu are going to be different than housing prices in most other parts of the country.

What I’m looking for them to do is have the seller leave that mortgage out there and deed me the house so I’ve got ownership. Let me make payments on the mortgage but that mortgage stays in the seller’s name.

If you go out to a place and it already has an 80 percent loan to value first mortgage on it, I can’t be in there doing the formula on that house at around 85 percent. It’s some place between 84 and 87 percent.

What’s a higher prices house? You can be up at 87. If it’s a lower priced house you want to be down around 84. My point is that we feel that we’re safe in those ranges if you get a house free.

Always make sure you’re after repaired value is on target. If that number is messed up everything else is messed up.

When making an offer, we make an extremely low offer. This is an offer that would allow us to make a lot of money when flipping houses for profit. Many times it’s going to be rejected but not always. Sometimes people fear to make too low of an offer because they are afraid they are going to get turned down. It doesn’t really matter if you don’t really want the property. Go ahead and make an offer. What happens if you lowball and they take it? Then you’re very happy.

If the offer is rejected, they may counter with something that is Okay. Say, “Okay I’ll take the offer if you have something else to entice me”. If not then you walk away and you have nothing to lose.

They are going to be shocked when you ask them to deed it to you. This means you need to have a script worked out about what you say to them. Ask them what they are going to do if you walk out and don’t buy the house? It’s going to end up one of the hundreds of other bank repo homes on the market. When that happens, they get nothing.

They’re probably going to go into foreclosure. When you sit down with somebody to discuss the deal you discover there are limits and you structure the deal from there.

They often need cash now or they need just enough to have moving money. Many times they’ll just deed me the house and I don’t have to pay them anything.

I like to make three offers a lot of times. The interesting thing about that is you never know which one they’re going to pick. I am thinking that they should pick number one and they pick number three. So I just offer them the three.

The first offer is all cash. The second’s one a split equity. And the third is the highest because they deed you the house immediately and then we pay them after we sell the house. With this, you can make more money but you have to wait maybe a year before you get that chunk of money.
About the Author

E. Alan Cowgill is the owner of Colby Properties, LLC. and President of Integrity Home Buyers, Inc. Since 1995, Alan has bought and sold hundreds of single family and/or small multi-family investment properties in Springfield, Ohio. Alan uses Private Lenders, not banks, to fund his real estate purchases. By doing this, he has created his own private bank of $2,000,000 in funds. Alan looks for situations where the seller, the lender, and the eventual homeowner can all "Win". He is not a Realtor, but a Private Investor, author, consultant and national speaker. He has been asked to speak on the topics of ‘Investing for the Beginning Investor.’ and ‘Finding Private Lenders.’ His home study system, ‘Private Lending Made Easy’, shows new and seasoned real estate investors how to find private lenders for their own real estate business.

His website is
http://www.supercoolsystems.com

How do u make an offer for trading on WiFi with pokemon diamond for Nintendo DS?

I finally figured out how to do WiFi but i don't know how to make an offer.

click deposit pokemon, then it will ask what you want to ask for. or if you find a pkmn u want in the search, just press a & it will bring u 2 ur pc box to select the pkmn to trade

I'm gonna make him an offer he can't refuse